Buying a property in Seoul: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

Yes, the analysis of Seoul's property market is included in our pack

Thinking of buying a property in Seoul? You're not alone!

Many people are drawn to Seoul's dynamic urban life and fantasize about owning a modern apartment or a stylish townhouse there.

Is it worth investing there, though? Are property prices increasing in Seoul? Is it expensive? Is it better to invest in Gangnam or Itaewon? What are the property taxes? Where can you get a yield above 7%?

We know the answers.

The BambooRoutes team has done their homework and know this market well. Actually, we've compiled all our findings in one pack. Get it now.

In this article, we'll provide you with helpful information.

How is the property market in Seoul?

Confused about the property market's status? Everyone has their views. As for us, we prefer stick to new data and stats for clear conclusions.

Property types

In Seoul, you can find various types of properties for sale, catering to different needs and preferences.

These include apartments, which are the most common and come in various sizes, from small studio units to spacious penthouses. There are also single-family houses, suitable for those seeking more space and privacy.

For investors, there are commercial properties like shops and offices available in bustling areas.

Additionally, you can find modern and traditional Korean-style houses called "hanok" for a unique living experience.

Whether you're looking for a cozy home, a bustling city space, or a blend of tradition and modernity, Seoul offers a diverse range of properties to suit your lifestyle and budget.

Better to buy or rent?

(If you're purchasing for personal use and not for renting)

Whether you're already living in Seoul or planning to move to the bustling South Korean capital, the decision to buy or rent a property is likely on your mind.

Without a doubt, it's better to buy if you want to have more control over your living space and to build equity over time.

To make a good decision, look at the property price-to-rent ratio. It's a way to understand how many years of rental income you need to cover the property's current price.

According to Numbeo, the property price-to-rent ratio in Seoul is around 85.08, which is one of the highest in the world.

If the ratio is high, it indicates that buying properties are more expensive in the short term compared to renting. However, buying can still be a viable option if you plan to live in the property for an extended period or if you believe property values will increase significantly over time.

Property prices in Seoul

On average, according to the last reported data from Kookmin bank, South Korea, purchasing a property in Seoul would cost you around $11,500 per square meter.

Clearly, there is a substantial range. The value of a square meter for an apartment in Gangnam might differ from a house in Itaewon. We actually offer a more in-depth analysis in our pack for buying property in Seoul and in South Korea.

To give you some context, it is similar to the property prices you can find in Paris currently.

Also, housing prices in Seoul are higher (24%) than in Busan.

The most expensive neighbourhoods in Seoul are probably Gangnam, Seocho, and Yongsan, while the cheapest areas are typically located in the outer parts of the city.

Trends

First and foremost, we have to acknowledge that South Korea currently stands out for its remarkable stability. The last Fragile State Index that has been reported for this place is 32.7.

It is something to have in mind when wondering whether it's a good investment to buy a property in Seoul.

Also, according to the International Monetary Fund (IMF), South Korea's economy is expected to soar by 9.9% in the coming 5 years, resulting in an average GDP growth rate of 2%.

If you intend to invest in real estate in Seoul it's a good thing because when the economy grows, people tend to become wealthier, which usually results in higher housing prices.

Also, in South Korea, the average GDP per capita has changed by 8.3% over the last 5 years. It's a good performance.

This is a strong positive signal: housing prices in Seoul might become more expensive in 2024 and later on.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in South Korea right now.

Buying property in Seoul

Buying real estate in Seoul can be difficult due to the lack of reliable and up-to-date information available. That's why we have created the pack to buy property in Seoul and in South Korea.

Buying process

Within our pack, we have outlined the complete buying process. This includes the necessary documents, the applicable taxes, as well as information about where to locate properties, and more.

Here, we are providing you with a simpler version to assist you in better comprehending the information.

This is the step-by-step process to purchase a property in Seoul:

1. Research the Seoul property market and set a budget.
2. Engage a licensed real estate agent or broker familiar with Seoul's regulations.
3. View properties and select one that meets your criteria and fits Seoul's zoning laws.
4. Conduct due diligence on the property's ownership history, title, and land-use permissions.
5. Negotiate the price and terms with the seller or agent.
6. Sign a "Promise of Sale" agreement and pay a deposit (usually 10% of the property price).
7. Apply for a certificate of alien registration (if a foreigner).
8. Secure a mortgage or financing from a Korean bank (if needed).
9. Complete the property transfer registration (within 60 days) at the Seoul Metropolitan Government Office.
10. Pay the remaining balance and all associated taxes and fees, including acquisition tax and registration tax.
11. Register the property with the local district office and obtain a new certificate of ownership.
12. Receive the new property ownership certificate and complete the purchase process, adhering to Seoul's specific regulations.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in South Korea.

Make a profitable investment in Seoul

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Where to find a property

Start your property search in Seoul by exploring these websites:

• Hometown Realty - Offers high-rise apartments, villas, single houses, and short-term rental options.
• Seoul Homes - Provides a wide range of options for rent, sale, and pre-sale properties in Seoul.
• Smile Seoul Real Estate - Offers various properties for sale and rent in different neighborhoods of Seoul.
• AtSeoul Real-Estate - Specializes in high-rise apartments, villas, single houses, and office spaces in Seoul.
• Alice Realty - Offers a variety of properties, including high-rise apartments, villas, and single houses in Seoul.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in South Korea.

What properties?

As mentioned before, the average price per sqm in Seoul is $11,500. A 1-bedroom property, with an area of 60 square meters, would cost approximately $690,000, while a 2-bedroom, with an area of 85 square meters, would cost approximately $978,000.

Of course, the price of properties can be influenced by their qualities and the area they're in.

Top neighborhoods in Seoul will be pricier. A residence in Gangnam might be around $2,790,000, whereas a residence in Itaewon could be priced at $2,590,000.

Of course, some regions offer more affordability. You may find a condominium in Gangseo for $380,000, or one in Dobong priced only at $310,000.

We give a more detailed breakdown in our full pack for buying property in South Korea.

Common mistakes

Here are the main pitfalls when buying a property in Seoul:

• High property prices and competition may lead to overpaying.
• Complex legal processes and unfamiliarity with Korean regulations.
• Undisclosed structural issues or hidden maintenance costs.
• Limited availability of freehold properties for foreigners.
• Difficulty in securing financing or obtaining a mortgage.
• Lack of transparency in property history and ownership.
• Language barrier and challenges in communication with local sellers.
• Zoning restrictions or changes that may impact property usage.

Here are more specific pitfalls unique to buying property in Seoul, South Korea:

• Jeonse system: The "Jeonse" deposit system, common in Seoul, requires a large lump-sum deposit instead of monthly rent, which can tie up significant funds without interest.
• Apartments in redevelopment zones: Beware of purchasing apartments in redevelopment zones, as you may face uncertainty and disruption during the redevelopment process.
• Housing speculation regulations: Government policies to curb speculation can affect property values and resale options.
• Urban planning changes: Rapid urban development may alter the neighborhood's character, affecting property values and suitability.
• Ownership restrictions: Foreigners face limitations on acquiring certain properties or land, requiring specific approval processes.
• Older building regulations: Older properties might not meet current building codes and energy efficiency standards.
• Maintenance fees and regulations: High maintenance fees and strict building regulations can increase ownership costs.
• Limited parking: Lack of parking spaces in central areas can be challenging for property owners and tenants.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our South Korea Property Pack

Living in Seoul

Living in Seoul is an exciting and vibrant experience, offering a unique blend of modern city living and traditional culture.

Cost of living

The cost of living in Seoul is generally considered to be higher than in many other cities around the world due to its high cost of housing. However, the cost of goods and services is relatively affordable, making it a great place to live for those on a budget.

Here are some examples to better understand the cost of living in Seoul:

• Rent for a one-bedroom apartment in Gangnam district: $1,800/month.
• Monthly public transportation pass (T-money card): $60.
• Traditional Korean meal (bulgogi) at a local restaurant: $12.
• Soju (Korean alcoholic beverage) at a bar in Hongdae: $4.
• Groceries at a local market in Myeongdong: $100/week for a family of four.
• Basic utilities for an 85m² apartment with Hanwha Energy: $180/month.
• Membership at a jjimjilbang (Korean sauna and spa): $30/month.
• A cup of traditional Korean tea in Insadong: $5.

Neighbourhoods

We want to make the information easy to understand and enjoyable to read. So, we made a table with a summary of the different areas in Seoul. For yields, prices and rents, check our property pack.

Life in Seoul

Seoul is the financial hub of South Korea, and its economy is characterized by strong exports, a competitive manufacturing sector, and a robust financial services industry. The city is home to numerous multinational companies and has the highest GDP per capita of any city in South Korea.

According to the IMF's data, the GDP of Seoul makes up nearly 51% of South Korea's GDP. That's a good thing because, when you buy property in a city with a strong economy, your investment is usually safer and not as affected by changes in the market.

What expats usually like the most in Seoul are the vibrant nightlife, with an abundance of bars and clubs, and the variety of shopping experiences, from traditional markets to modern malls.

Another great point to note is that Seoul is an incredibly safe city, with a crime index of only 25, which is a very impressive score. Seoul has a culture of respect for the law and a strong emphasis on personal responsibility, which helps to discourage criminal activity.

A good point for a property investor - Seoul has an extensive and highly efficient mass rapid transit (MRT) system.

Access to healthcare in Seoul is more than excellent, with a Healthcare Index of 83. A strong healthcare system and infrastructure will always make a place more attractive, which is positive for real estate.

Finally, it is worth noting that Seoul has two universities ranked in the top 100 worldwide: Seoul National University and Yonsei University.

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Renting out in Seoul

This part is for you if you want to buy a property with the goal of renting it out and making money from it, rather than living there.

Long-term

Tenant Profiles in Seoul

According to the data reported by Wikipedia, the home ownership rate in South Korea is 57%, which is not much.

It means that, if you decide to buy and rent out in Seoul, there will be a lot of people who can become your potential tenants.

If you decide to buy and rent out to long-term tenants, you should target young professionals, expats, and students, as they are the most common tenant profile in Seoul. Additionally, there is a growing demand for family-oriented tenants, particularly due to the influx of families from other parts of the country.

Here is a little summary table we've made for you.

Rental yields

As of today, rental yields in Seoul are quite low, below 2% that's for sure. Among other things, this low performance can be explained by the high property prices in Seoul, which make it difficult to achieve a high rental yield.

The best rental yields in Seoul are usually found in older properties located in popular areas that are close to public transportation. This is because these areas are in high demand and provide convenient access to the rest of the city.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Short-term

You could also decide to rent short-term to tourists visiting Seoul, or business travelers coming to the city for short-term projects. Additionally, students attending universities in Seoul may also be interested in short-term rentals.

If you decide to go with that option, look for properties in central areas such as Gangnam, Jongno, and Hongdae that have access to public transportation and are close to tourist attractions. Additionally, consider the university areas of Sinchon, Hyehwa, and Ewha Womans University for a steady stream of short-term tenants.

You will have some competition though - there are around 17,000 Airbnb listings in Seoul. The average daily rate stands around $82.

You have the opportunity to generate a nice additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Seoul can make around $1100 per month. Also, the average occupancy rate is estimated at 82%.

Is it worth buying real estate in Seoul then?

Buying a property in Seoul can be a smart move if you plan to live there for the long term, as it offers stability and control over your living space. It's also a decent option if you're looking to invest in the future, given Seoul's stable property market and the city's anticipated economic growth. Rental income is possible, but keep in mind that it might not be as lucrative due to relatively low rental yields.

The diverse range of property types in Seoul allows you to find a home that suits your preferences and budget.

On the flip side, if you're only staying in Seoul for a short time, buying property may not be financially wise, as renting could be more cost-effective. The high property prices in desirable areas like Gangnam can be a hurdle, especially for those with limited budgets. The complex buying process, potential language barriers, and ownership restrictions for foreigners can add further complications.

Additionally, if you're seeking high rental income in the short term, Seoul may not offer the best returns due to low rental yields.

In summary, whether buying a property in Seoul is worth it depends on your specific circumstances and long-term goals. It's a good choice for those planning to settle down, invest for the future, or generate rental income over an extended period. However, for short-term stays, limited budgets, or immediate high rental yields, it might not be the most favorable option. Extensive research and a clear understanding of your objectives are essential before making such a significant decision.

Make sure you understand the real estate market in Seoul

Don't rush into buying the wrong property in South Korea. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.